New federal rule could have worst impact on small states

By Dennis Carter, Assistant Editor

March 28th, 2011

Online schools could face high registration fees in many states.

Colleges with online programs might withdraw from states, mostly in the northeast, that have small populations and stringent requirements for distance education courses when the Education Department’s (ED’s) “state authorization” regulation kicks in July 1.

Decision makers from online schools from across the country gathered March 28 in Washington, D.C. for the annual Presidents’ Forum, hosted by web-based Excelsior College. Presidents, provosts, and deans decried the state authorization rule, which will require schools to gain approval from every state in which they have a student.

Robert Mendenhall, president of Western Governors University, said during his address to the forum that certification fees vary widely from state to state, with many of the toughest approval processes in small states such as Massachusetts and New Hampshire.

If an online college doesn’t have many students in one of those small states, the high fees could mean the school would simply leave the state and no longer offer classes there.

“There’s a whole different return on investment now. We have to look at costs for each state and see if we can justify” hosting web-based classes there, Mendenhall said, adding that students who move to a state with strict regulations wouldn’t be able to finish their degree with their original college. “This could be a big problem for a lot of students.”

Other officials at the Presidents’ Forum pointed to New York, Ohio, and Minnesota as states whose requirements will prove expensive for online programs. Several forum attendees raised the prospect of attorneys general from small states banning together and filing a lawsuit or injunction to prevent the state authorization rule from taking effect.